Verizon Prices Largest Corporate Bond Deal

Verizon Communications priced a $49 billion bond offering Wednesday. This would be the biggest corporate debt coffering in history. The company will utilize the proceeds of the bond deal to finance the acquisition of the remaining stakes in its wireless unit, which is worth $130 billion. The telecommunications giant sold three year, five year, seven year, 10 year, 20 year and 30 year maturities.

Verizon’s 30 year bond was priced to yield 6.559 percent. Its 10 year bond was priced to yield 5.192 percent. The company sold $11 billion of 10 year bonds and $15 billion of 30 year bonds. The pricing didn’t surprise the market as the bond spreads narrowed.

The final size of the bond deal was at the top end of the $45 to $9 billion range that market sources flagged late after the overwhelming demand in excess of $100 billion. The sale removed the need for Verizon to tap the sterling and euro market as they initially planned. This move left some investors disappointed.

The overwhelming response to the bond offering came after Verizon decided to offer bargain basement prices for the notes. It ensured the company that it got the financing required to pay Vodafone for its 45 percent stake in Verizon Wireless.

The bond offering made by Verizon will also partially refinance its $61 billion one year bridge loan it got to pay for the debt funding portion of the acquisition. The rest of the bridge loan will be replaced with around $12 billion of three and five year term loans.

The Verizon deal was more than the debt sale made by Apple, who sold $17 billion in bonds earlier this year. The $49 billion bond deal was larger than the combined size of the next three biggest bond deals in history, which were made by Apple, Roche and Abbvie.